FINANCIAL REPORTS BY SUPERGRADES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP81-00142R000100010006-7
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 12, 2016
• Document Release Date: June 19, 2002
• Sequence Number: 6
• Publication Date: December 1, 1978
• Content Type: MF

Approved Release 2002/08/21 : CIA-RDP81-00R000100010006-7 P?/j P'77?slry
OGC 78-7986
1 December 1978
MEMORANDUM FOR: Deputy Director for Administration
STATINTL FROM : DDI~ R030Counsel 14 ii~~
Associate General
SUBJECT _ Financial Reports by Superg s
1. As you know, the new Ethics in Government Act of
1978 imposes stringent financial reporting requirements on
GS-16's and above. This changes existing law in that all
employees in supergrade positions must report and that the
information must be reported in a great deal more detail and
specificity than heretofore. The law is effective 1 January
1979 and the first disclosure reports are due to be filed on
15 May 1979.
2. Attached is a draft notice in general terms de-
signed to alert all concerned to the reporting requirements,
which you may want to consider for issuance. Unfortunately
it is not yet clear whether or at what point these require-
ments will apply to those who leave Government service
between the effective date of the Act, 1 January 1979, and
the first specified filing date, 15 May 1979. One inter-
pretation of the Act is that all those supergrades whose
employment ceases after 1 January 1979 will be required to
file, within 30 days after leaving office, reports covering
all of 1978 and that portion of 1979 up to the date of
termination. Another interpretation is that such reports
will be required only as to those who terminate after 1
March 1979. There may be other possible readings of the Act
on this point, and it probably will take a while for a
definitive interpretation to emerge. Notwithstanding the
uncertainty that surrounds this aspect of the legislation, I
favor going ahead with a notice. Indeed, one of the pur-
poses of such a notice is to alert supergrade employees whQ
may be departing the Agency in the near future to the
possibility that financial disclosure reports may be re-
quired.
3. The Act also provides appropriate enforcement
authority for agency heads and the Department of Justice. STATINT
OGC Has Reviewed
Attachment
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y&, KVf-,f
1. This notice #* to alert senior-level employees to
the far-reaching changes in financial reporting requirements
which were established by the Ethics in Government Act of
1978, signed by the President in late October. Several
special aspects as to intelligence officers are noted also.
Additional guidance from the Civil Service Commission is
anticipated. Additional information and requirements under
the new Act will be disseminated in due course.
2. The new Act provides that all officers and employees
whose positions are classified at GS-16 or above (and their
equivalents) must file with the Agency a detailed report of
their financial interests. Apparently, the reporting require-
ment is based on the grade of the position, rather than that
of the employee. Civil Service guidance on this point is
anticipated. The reports are to be filed by 15 May of each
year, to include information concerning the preceding year.
3. The Agency is required to make the reports avail-
able to the public. However, the Act authorizes the Presi-
dent to exempt certain employees of CIA and other intelli-
gence agencies from the public disclosure requirements upon
his finding that "due to the nature of the office or position
occupied by such individual, public disclosure of such
report would, by revealing the identity of the individual or
other sensitive information, compromise the national interest
of the United States." A review of Agency positions is
underway to determine what positions should be recommended
to the President as appropriate for exemption from the
public disclosure provisions. The Act also provides that
individuals exempted from the public disclosure requirements
"may be authorized... to file such additional reports as are
necessary to protect their identity from public disclosure
if the President first finds that such filing is necessary
in the national interest." This provision was included to
permit compliance with the reporting requirements by intel-
ligence personnel, but also permit them to maintain cover.
It is anticipated that recommendations in this area also
will be proposed to the Director at an early date.
4. The financial interests to be reported must be
reported in much greater detail and specificity than has
been required in the past under existing Executive orders
and regulations. For example (in general terms), the following
must be reported:
a. the source and type of dividends, rents,
interest and capital gains and an indication of the
amount, in terms of any of seven specified ranges,
i.e., "not more than $1000" to "greater than $100,000;"
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b. the source, type and amount of all other
income (except Government salaries);
c. the source and a description of gifts and
entertainment above a specified amount;
d. the identity and value of any interest in
property held for trade or business or for investment
or the production of income;
e. the identity and value of liabilities in
excess of $10,000, other than personal residence
mortgages, and loans for motor vehicles or household
effects;
f. a description, the date and value of any
purchase, sale or exchange of real property (other than
personal residence), stocks, bonds, commodities futures
and other forms of securities;
g. the identity of positions held in any business
enterprise, non-profit organization, labor organization
or educational institution; and
h. the identity of the source (other than the
United States Government) of any compensation in excess
of $5,000 and a description of the duties or services
for which it was paid.
5. The reports must include extensive information with
respect to any trusts or other financial arrangements in
which the employee has a beneficial interest.
6. Some financial interests of the employee's spouse
and dependent children must be reported also.
7. At this point it remains uncertain whether the
reporting requirements of the Act will apply in the case of
supergrade employees whose Government employment ceases
between the effective date of the Act, 1 January 1979, and
the first specified filing date, 15 May 1979. The pro-
visions of the Act are ambiguous in this regard, and it may
take several more weeks before a definitive interpretation
emerges, but those supergrade employees planning to retire
on or after 1 January 1979 and before 15 May 1979 should be
aware of the possibility that reports may be required.
8. It should be understood also that there is no way
to know when the President will act to exempt at least some
CIA employees from the public disclosure provisions, but it
seems almost certain that this will not be done by the first
few weeks of 1979. Thus, the financial reports filed by
those employees who terminate in early 1979 would be subject
to public disclosure, at least until such time as the President
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9. Agency heads must report to the Attorney General
"the name of any individual he has reasonable cause to be-
lieve has willfully failed to file a report or has willfully
falsified" a report. And the Attorney General may bring a
civil action against such individual, in which event the
court may assess against the individual a civil penalty of
not to exceed $5,000.
10. It is anticipated that reporting forms will be
developed by the Civil Service Commission and will be
available at an early date. Employees who file before such
forms are available may do so by narrative or other written
submission.
11. The current Executive order requiring financial
interests reports, and CIA regulations thereunder, apply
also to some employees at less than GS-16 grades. Whether
modification or rescission of those Agency regulations would
be appropriate in view of the new statute is now being
considered.
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